Around 100 million free shares have been allocated for eligible employees of Royal Mail, giving a total initial market value of £489m.

Each eligible full-time employee in Royal Mail is entitled to 725 free shares with an initial market value of £3,545.25 - above the £3,000 maximum amount that can be allocated to an individual member of staff in a tax year under HMRC rules.

Royal Mail said due to the strong performance of the shares, this limit has been exceeded.

A total 613 shares worth £2,997.57 at the closing mid-price on Tuesday have been awarded to each eligible full-time employee.

Royal Mail intends to allocate the 112 surplus shares to individual full-time employees as soon as possible in the next tax year.

Less than 0.5% of around 150,000 of eligible full-time and part-time Royal Mail employees based in the UK chose to opt out of receiving free shares.

Image Caption:Price correct at 08:35 BST

Royal Mail's value continued to grow when full dealing began on the London Stock Exchange earlier, though some individuals expressed frustration they were unable to sell.

Investors - lured by the promise of healthy dividends - sought out shares with the price rising more than 3% in early trading when the stock became available to the wider market following its conditional launch.

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In the first day of dealing for many of the 690,000 small investors who bought stock the shares opened at 478p before climbing further to 490p in the first hour.

Its closing price of 489p implied a rise in the company's value of £140m in one day, to reach £4.9bn. The initial offer had valued Royal Mail at £3.3bn.

That compares with the 330p per share price they were sold for on Thursday, meaning small investors who were allocated shares worth £750 originally are today sitting on paper profits of more than £360.

But not everyone was able to trade - the Department for Business confirming that those who applied for shares via the post had been told they would receive a letter within a week setting out how they could sell their shares.

Those who applied online should, the department said, receive an email within two days of listing, giving them an ID and password to sell their shares via the official website.

Only institutional investors such as pension funds and those individuals who ordered stock through a broker offering conditional trade were able to sell before Tuesday.

Around 150,000 postal workers are having to sit on stakes now worth more than £3,200 each because they can not sell their shares for three years under the terms of the 10% free-holding.

While fewer than 390 staff eligible for the offer turned it down, staff are known to bitterly oppose the privatisation and Wednesday will see the result of a strike ballot by members of the CWU over issues linked to the sale.

CWU members are expected to back industrial action, with any strike set to be held on or after October 23.

The windfall for investors has prompted further questions about whether the Government short-changed the taxpayer over the privatisation.

Dave Ward, CWU deputy general secretary, said: "The Royal Mail share price has soared further today, bringing more proof that the company was undervalued by the Government's City mates.

"The taxpayer has lost over #1 billion already in this bungled fire sale of a cherished national institution," he said.

The Business Secretary Vince Cable - who has defended the pricing of the sale - has been asked to give fresh evidence to a committee of MPs over the privatisation while investment bank Lazard was also set to be questioned.

Sky News learned on Monday that some members of the Business, Innovation and Skills Select Committee of MPs wanted to interview executives from the syndicate of banks responsible for pricing the initial public offering at 330p-per-share.

She said: "This marks the exciting next phase in our company's long and proud history.

"With the support of our new shareholders, we are in a strong position to move forward, to compete effectively across our markets and to grow our business.

"Royal Mail will continue to be an essential part of the fabric of the UK, providing the universal postal service that is cherished by the 29 million households and businesses across the country that we serve."